Ecuador reduces tax burden on mobile operators

6 Dec 2021

The Ecuadorian government has confirmed that the Special Consumption Tax (Impuesto a los Consumos Especiales, ICE) will no longer be applied to fixed voice and mobile phone services with effect from 1 December, following the entry into force of the new Economic Development Law. International trade groups such as the GSMA and the Inter-American Association of Telecommunications Companies (Asociacion Interamericana de Empresas de Telecomunicaciones [ASIET]) had been lobbying the country’s new president Guillermo Lasso, who took office in May this year, to scrap the monthly levy – previously 10% for individual plans and 15% for corporate subscriptions – as a means to reduce the tax burden on telecoms companies and encourage service expansion, especially in rural areas.

Originally intended to promote competition in the market, the 15% excise duty was first levied on corporate fixed and mobile telephony services (except internet/data-only mobile services) on 1 May 2016 and maintained under a new taxation regime (the Ley Organica de Simplificacion y Progresividad Tributaria) effective from 1 January 2020, which introduced a monthly levy of 10% on consumer post-paid mobile services and 15% on subscription television services.